Cape Town - State officials contravening laws and regulations without consequences, lacklustre political leadership and skills shortages emerged as the key in the audit of national and provincial departments and public entities that showed some improvements, but also raised red flags, particularly over procurement and governance.
A total of R30.8 billion was misspent by departments and public entities on unauthorised, irregular and fruitless and wasteful expenditure, reads the national and provincial audit outcomes report for the 2012/13 financial year that was released on Wednesday.
Irregular expenditure for the 2012/13 financial year amounted to R26.4bn and, although reductions were made in government departments, public entities’ irregular spending increased by 33 percent from the previous financial year.
Unauthorised expenditure stood at R2.3bn, incurred by 32 departments.
“Little progress has been made in decreasing the extent thereof in the past three years,” the audit report says.
Fruitless and wasteful expenditure increased by 43 percent to R2.1bn. The main culprits were four provincial departments that incurred more than half of this amount, including health in Gauteng (R449.4m) and education in the Eastern Cape (R631.3m) and in Limpopo (R320m).
Of the 450 that were audited, ranging from national and provincial departments to public entities, 96 improved, but 61 regressed. The number of clean bills of financial health increased slightly to 105, comprising 24 departments and 81 public entities.
Outgoing Auditor-General Terence Nombembe declined on Wednesday to be drawn into what he called “the shaming or applauding” of any department. However, he acknowledged that health, education and public works were of concern as they made up half of those that received qualified audits.
While national basic education and health received unqualified audit opinions with findings, this was not the case in provinces, which deliver these services.
The audit report says while there was a slight improvement in complying with legislation, last year’s 93 percent non-compliance by national departments and 83 percent non-compliance among provincial departments stood unchanged.
It highlighted the lack of consequences for transgressions: Public Service and Administration Minister Lindiwe Sisulu confirmed there had been no prosecutions of transgressing the financial management laws.
Only about half of the cabinet ministers and MECs provided the required leadership positively to affect their departments.
“Our assessment that executive authorities are not yet providing the required level of assurance is based on the inadequate leadership controls observed at almost half of the auditees,” the report says.
Nombembe said the pending legislative steps like the Public Administration Management Bill, which aims to bar public servants from doing business with the state, would assist in sustainable tightening of internal controls.
In many cases, internal controls had already improved, and it was now important to ensure this was sustainable in leadership, governance and financial performance areas.
Overall, risk areas include supply chain management, or procurement, human resource management, information technology and the quality of financial statements, as only 43 percent of departments and entities submitted statements without material misstatements.
At national level, the worst performers with a qualified audit with findings included correctional services, water affairs and home affairs, which all remained unchanged from the previous financial year.
Defence regressed and public works improved.
At provincial level, Limpopo regressed, as did Gauteng, although it was due to public entities’ performance, rather than departments. North West remained stagnant, while other provinces improved.
In KwaZulu-Natal, departments that received a qualified audit with findings include arts and culture, education, health and social development. Clean audits were given to transport, the treasury and legislature.
The Western Cape has no departments with qualified audits or disclaimers. A clean bill of financial health was given to agriculture, community safety, economic development, cultural affairs and sport and transport and public works.
In the Eastern Cape only the Office of the Premier and Treasury received an unqualified audit opinion, with qualified audit opinions with findings for agriculture, education, health and sport.
Cape Argus